back to article Awkward? Elop now answers to ex-junior Nadella as Microsoft closes Nokia buyout

Microsoft has closed its $7.1bn garbage-trucks-colliding deal to buy Nokia’s struggling mobile handset business. The software giant announced the successful completion of a seven-month campaign to take ownership of the Nokia unit, announced last September. Nokia now becomes the Microsoft Devices Group, headed by Nokia’s …

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  1. Frankee Llonnygog

    Nice picture

    Didn't realise there was a sequel to Trollhunter

  2. Mikel

    Android Linux

    Microsoft now makes and sells Linux computers. I never thought I would live to see that day.

    1. Christian Berger

      Re: Android Linux

      They do that for years. I think half a decade ago they signed an agreement with Novel. After all Microsoft also has a services branch and they somehow need to stay competitive.

    2. big_D Silver badge

      Re: Android Linux

      And what have they been selling on Azure for the last year? Linux hosts alongside Windows.

  3. Christian Berger

    If I was an engineer at Nokia

    I'd try to get my colleagues to quit with me to create a company. Investors love that and if it's something about the mobile web or the cloud they are even more likely to turn on the money hose.

    Then you pay out the investor money in salaries and wait till you are bought up by some larger company. You then quit after having sacked in the money.

    And if anything fails, you can still go next door to Huawei or any other of the companies setting up their camps near the Nokia campus... which is what you and your colleagues probably are thinking of doing anyhow.

    1. Flocke Kroes Silver badge

      Already happened

      https://en.wikipedia.org/wiki/Jolla

      1. Christian Berger

        Re: Already happened

        Yes, but Jolla actually has a bit of a chance to succeed. (Even though the current hardware it runs on is brain dead)

    2. Irongut

      Re: If I was an engineer at Nokia

      You're over 3 years too late with your suggestion; see Jolla.

    3. SpiderPig

      Re: If I was an engineer at Nokia

      They did, the company is called Jolla and the OS Sailfish

  4. Tom7
    Devil

    Let's see:

    • Elop went in to Nokia from Microsoft.
    • The ex-Microsoft CEO pushed them on to Windows Phone.
    • The push to Windows Phone basically ended any chance of Nokia turning around their phone sales.
    • A year or so later, Microsoft comes in to 'rescue' the failing Nokia devices section.

    Is that a fair summary? It's getting hard to see Elop as anything other than a Trojan horse.

    1. Flocke Kroes Silver badge

      You missed one big bit

      When Elop joined Nokia, Nokia sold more smart phones than Apple and Samsung combined. Nokia's market share was rising. Elop turned that around with a combined Ratner and Osbourne, then followed it up by restricting the N9 to a few small markets because it got better reviews than iPhone. Elop flawlessly executed his plan to trigger a $25million bonus from Nokia for selling Nokia to Microsoft. That is the sort of vision Microsoft needs from its employees. I am sure Elop will be sending his CV off to Samsung and Apple next.

      1. Mikel

        Re: You missed one big bit

        Also, before Elop, Nokia's smartphone business was hugely profitable. After the burning platform memo it never again made a quarterly profit.

        Finland got slaughtered on this one. A lot of retirement plans went bankrupt. All the things that happen in this life that get criminal investigations and lawsuits, this one gets a pass for some reason.

        What a strange world.

        1. Sander van der Wal
          Gimp

          Re: You missed one big bit

          Nokia was loosing market share in Europe as soon as iPhone was released there. Look at the Nokia Group Annual accounts at this web page: http://company.nokia.com/en/investors/financial-reports/results-reports.

          The interesting section in the reports is the top 10 market bit. Just compare the figures for the European markets year over year.

          Nokia was still growing, but their key markets were collapsing as soon as the competition entered. At some point you will then stop growing. Which Nokia did, just before the famous Memo. Obviously, management already knew they were in trouble, and they tried something new. Fully aware that it might not work, as it did not.

      2. Yet Another Anonymous coward Silver badge

        Re: You missed one big bit

        You also missed the bit where Elop got to keep, and forgot to declare, a bunch of share and bonus options at Microsoft - which were dependant on MSFT getting sales of its Windows Mobile product to some handset maker.

      3. Anonymous Coward
        Anonymous Coward

        Re: You missed one big bit

        @ Flocke Kroes,

        You almost make it sound like financial engineering counts for more in tech than actual enginee....Wait a second! I think I'm having an epiphany!! Arrrgggghhhhh!!!!!

    2. Levente Szileszky

      Yes and lot of us predicted EVERY SINGLE STEP YEARS AHEAD...

      ...right when Elop was first time rumored to be the pick to lead Nokia.

      It was obvious from the beginning, they did a takedown from the inside.

      Now I have ZERO sympathy left for MSFT.

  5. Sean Timarco Baggaley

    "...grand turnaround plan from Elop that was supposed to save Nokia."

    Last time I checked, Nokia still exists: it's just changed its focus. Nokia have done this before: its ancestors used to manufacture comms cables and rubber products. (Similarly, Nintendo originally made playing cards.) Today's Nokia is focusing on other things, like telecoms infrastructure. It's still going. It's not dead. Even the name continues.

    Shareholders don't give a toss how a business makes its profits, so long as it makes some.

    Nokia's mobile phone teams were in a huge mess. The writing was on the wall for Symbian as far back as 2003: they just let it rest on its laurels. Then Apple caught Nokia with their strategic management team's pants down and their hand dipping into a nearly empty box of tissues.

    Similarly, System 40 was trundling away nicely at the low end, but landfill Android devices appeared quickly and started banging nails into that coffin too. Nokia bought in their "Asha" platform, but this is still a very limited OS and unlikely to stick around for much longer now that Microsoft are calling the shots.

    What's important here is that Nokia managed all that before Elop came along. By the time Elop turned up, his only option was to find a buyer for this increasingly irrelevant branch of Nokia... but who's going to buy a mobile devices department that's still buggering about with not one, but two increasingly obsolete operating systems that few people are interested in?

    Hence Windows. Elop came from Microsoft, so he not only knew what MS were working on, but it's also simply what he knows. Android would have turned Nokia into yet another "me too" company, forced to fight behemoths like Samsung and Sony – the company wouldn't have stood a chance.

    Windows Phone across the board seems the most likely future for Microsoft's new acquisition. Keeping one or two Android-based devices on the market has some advantages even for Microsoft: they've recently released a very good version of their Office suite for the iOS platform; there's no reason to assume they're not considering something similar for Android too. And now that Microsoft also have an own-brand Android device that looks like a Windows Phone 8 one, they can bundle MS Office with it for free.

    Remember, MS are switching to a "devices and services" philosophy. Like Nokia, they're changing at a fundamental level, but you don't turn a company that size around in a few minutes. It'll be a few years yet before we'll know if this strategy has worked. This acquisition adds some of the final pieces to the puzzle.

    What Apple have become to the consumer, MS are aiming to be for the enterprise. This is going to be a very interesting decade or so.

    1. Anonymous Coward
      Anonymous Coward

      Re: "...grand turnaround plan from Elop that was supposed to save Nokia."

      Nice fairy tale.

    2. Anonymous Coward
      Anonymous Coward

      Re: Re: "...grand turnaround plan from Elop that was supposed to save Nokia."

      Last time I posted something like that, I got downvoted so far that I could see Satan's bottom from underneath, by the true believers. I hope you get luckier (no downvotes so far) because it needs to be said: Nokia seem to have been doing a Wile E Coyote, heading rapidly for the cliff edge and about to hang in space, legs whirling frantically. Corporate bloat, empire building and lack of focus eventually bring down everything.

    3. Decade
      Facepalm

      Re: "...grand turnaround plan from Elop that was supposed to save Nokia."

      What a revisionist story.

      When Elop took control of Nokia, Samsung wasn't even considered a threat. The main reason not to go Android was the very legitimate fear of losing their investment in Navteq. The main reason to go Windows was bizarre (that Nokia would be so big they could influence Microsoft's development), and as it turned out, the naysayers were right. Microsoft's slow development of Windows Phone has hurt Nokia's desirability and their attempts to do phablets.

      Windows Phone and Android were not the only alternatives. Nokia was also working on MeeGo, which had a transition plan for their huge Symbian installed base, but was mired in mismanagement. Even after Elop torched his platforms, a small group was working on Meltemi Linux, until Elop noticed and fired them.

      With Windows Phone, Nokia was the biggest fish in a small pond. They've managed to sell many phones, primarily by being the only Windows Phone OEM willing to lose money on every device. Microsoft was not "devices and services" back then.

      It's good for Nokia's shareholders right now to have a profitable company again, but I'd be surprised if that were the plan. It would have been immensely better to have a profitable company that was also the captain of the industry, and not a 10% market share also-ran.

    4. Flocke Kroes Silver badge

      @ Sean Timarco Baggaley

      Pretty graphs showing Nokia doing well when Elop took over in late 2010. The first iPhone was released in mid 2007, so that was not the event that caused the nose dive. The key event was the 'Burning platforms' memo, after the Q4 2010 results were announced:

      Nokia revenues, Smartphone sales, Nokia smartphone sales, Nokia profits. (for some reason these links require the re-load button to become visible).

      Nokia went from 34% market share to 3.5% because Elop selected Windows Phone (Nokia could not manufacture Lumia in their own factories) over N9 (excellent reviews, but Elop restricted sales to small markets so it would not outsell Lumia). Nokia stayed in business because of Microsoft handouts, Symbian sales and selling the head office (counted as a smartphone sale to make that division look less bad).

      Microsoft has strong legacy software revenues that even Vista and Window 8 cannot destroy (but Surface losses did wipe out the profit). There is only one way that can go - shrinking market and increasing prices. At some point, the market will shrink faster than the prices can rise and Microsoft will have to have something else in place ready to provide revenues.

      Personal computers are now hand-held battery operated devices with the market controlled by the network operators. Those operators will not tolerate Microsoft in their cartel, so Windows Phone will never get anywhere. Microsoft has announced this clearly by saying their Androidish products (Android OS, without Google's app store) are here to stay.

      Linux on Azure and Office for iPhone are all clear signs that Microsoft knows it is on a burning platform. There will be more generations of the Surface and Danger/Kin will get repeated because Microsoft need a future and they have the revenue to try again and again. The silly thing is that Microsoft do have a solid new revenue stream with an unlimited future - patent trolling Android phone manufacturers.

    5. Charles Manning

      MS have pissed in their own soup

      "What Apple have become to the consumer, MS are aiming to be for the enterprise. This is going to be a very interesting decade or so."

      This "give them a chance" attitude is bollocks. MS have had their chance and blown it. Don't forget that MS have been in the phone space for twice as long as Apple and Google so they really don't deserve breathing room for beginners.

      At one stage (early 2000s), Microsoft had the corporate phone biz sewn up. They then did nothing for a long time.

      Roll on to 2008 and they bought Danger Kin (a kiddy phone) from which they then extracted the DNA to make all the TIFKAM crap.

      Enterprise wants boring, beige tools that work. They don't want TIFKAM on their phones or desktops.

      Can you really be enterprise centric when you call some of the OS features "charms"? Sounds more like a Pink Pony OS for 8 year old girls.

      1. DropBear
        Trollface

        Re: MS have pissed in their own soup

        Can you really be enterprise centric when you call some of the OS features "charms"? Sounds more like a Pink Pony OS for 8 year old girls.

        Hey now, don't knock that - it's established MS tradition. I mean, wizards?!?

    6. SpiderPig

      Re: "...grand turnaround plan from Elop that was supposed to save Nokia."

      Symbian was left to its own devices but I saw an N8 that had a Qt interface that made the thing fly, yes I worked for Nokia at the time. All Symbian needed was a better interface from a consumer standpoint, it did have other issues that were not seen by the consumer.

      Meego had the potential to really cause some problems for Apple, look at the brilliant N9, Android and absolutely kill off anything mobile from M$. These issues were not just limited to the mobile handsets but also other products.

      Elop could not allow another OS to appear as he still had ties with M$ so both were destroyed.

      If Nokia had gone Android at the time, their hardware expertise etc would have kept Samsung and Sony where they belonged.

  6. Anonymous Coward
    Anonymous Coward

    Meanwhile in other news

    Both Nokia Windows users are said to be upset at the deal.

    1. Don Jefe
      Unhappy

      Re: Meanwhile in other news

      I hate to be the bearer of bad news. But that ship sailed a few years ago and was lost, to presumed sabotage a few years ago. The Captain of the Finnish ship Nokia was the only survivor. All other hands were lost.

  7. Anonymous Coward
    Anonymous Coward

    "Hence Windows. Elop came from Microsoft, so he not only knew what MS were working on, but it's also simply what he knows. Android would have turned Nokia into yet another "me too" company, forced to fight behemoths like Samsung and Sony – the company wouldn't have stood a chance."

    This is just nonsense. Anyone in the Mobile phone market is fighting all the other mobile manufacturers, whatever the operating system. Android would have given Nokia a better chance of survival, Windows Phone was, and still is, a failure.

    1. Jess

      While Android would almost certainly have been a much smaller disaster than Windows Phone, I really don't believe it would have been better than giving the Symbian and Meego teams a boot up the arse to get their act together. (If that was actually seriously needed at that point, as many commentators claim).

      The difference between Belle and the older Symbian versions on the E72 for example was huge, the hardware in the phones was great, if they were to have carried on cleaning it up at a similar pace, Symbian Donna(?) phones would have matched any other phones. (The N8 with Belle is a great phone, but with a few horrid gotchas.)

      1. big_D Silver badge

        @Jess

        I sort of agree. By the time they could turn around the ship, there was no point going Android, htc and Samsung had pretty much cleaned up, so Nokia would have been just a.n.other Android maker. They might have been able to rely on their brand name in Europe, but otherwise it was pretty much hopeless.

        Nokia have always made excellent hardware, so it was a question of what they could add to it. Symbian needed too much work, so it probably wouldn't have been cost effective.

        To be honest, having switched from Symbian to iOS to Android to Windows Phone, I love my 1020 and think WP8 was probably the right choice. I'd like to have seen Symbian survive, having used its predecessor in the late 80s and early 90s, but WP8 meant they could more quickly go to market, re-engineering Symbian would have taken too long to be any form of parachute.

  8. Christian Berger

    What may have been the problem

    Nokia mostly sold to operators. Operators are rather peckish and have different interests to the actual users. That's why the Maemo line shipped (mostly) without GSM modems.

    Just imagine a N770 with GSM or UMTS. Why use normal telephony on it, when you can not just use Skype, but even have a video capable SIP-client on it? Why use SMS when you have a variety of different instant messaging services? Why use WAP when you have a full featured web browser?

    A good smart phone goes against everything the operators want. Smart phones only cause traffic, but generate little income. If Nokia brought out one of those, they'd have severely damaged their business relation with the operators... or at least they thought they would.

    The only innovation Apple brought into this is that they gradually stopped caring about the interests of the carriers.

    1. Anonymous Coward
      Anonymous Coward

      Re: What may have been the problem

      And Apple stopped caring about the carriers because they created demand for their product, and so were able to go over their heads. Instead of buyers looking for the best deal from the monopolistic, anti-competitive and reactionary US carriers, they went to those carriers and said "We want an iPhone". Apple did what the FTC should have done years before, if it was doing its proper job, and for that we should be thankful to them.

      Nokia's problem was that they were losing the carrier battle in the world's richest telecoms market and, as you rightly say, they were coming out with products that ensured they would be seen as the enemy of the carriers. An alliance with Microsoft might well seem the best option for a non-US company. When confronting the playground bullies, get the biggest bully of the lot on your side first.

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